Karoon Provides Update on Zephyros Well Drilling (Australia)

Karoon Gas Australia Ltd advises that at 06:00 hours (WST) Tuesday, February 20, Zephyros-1 well was drilling out the 7-5/8” liner shoe in preparation for drilling ahead in the 6-1/2” hole section.

Since the last report, the 8-1/2” inch hole was drilled from 4000m to 4822m and 7-5/8” liner was run and cemented.

The Transocean Legend semi-submersible rig is drilling the ConocoPhillips-operated exploration well offshore Western Australia.

ConocoPhillips is the operator of the jointly held WA-314-P, WA-315-P and WA-398-P Browse Basin permits containing the previously  announced Poseidon and Kronos gas discoveries. Karoon Gas Australia Ltd holds 40% of the permit WA-315-P and WA-398-P, and 90% of permit  WA-314-P.

Zephyros-1 is the second well in the exploration program and follows the recent Boreas-1 well.

Zephyros-1 is located in permit WA-398-P on the flank of a large tilted fault block approximately 9 kilometres south west of the Kronos-1 discovery well. The objective of the Zephyros-1 well is to test the extent, presence and quality of Plover formation reservoirs.

Upcoming Well Program

The exploration program, operated by ConocoPhillips, plans to utilise the Transocean Legend semisubmersible rig for the entire campaign and is expected to continue through 2013.

A minimum of five wells will be drilled during the exploration program. The principal objective of the exploration program is to better define the size and quality of the hydrocarbon accumulations within the exploration permits which contain the greater Poseidon trend.

The third well, Proteus-1, is located in WA-398-P on a large tilted fault block approximately 14 kilometres south east of the Poseidon-1 discovery location. Additional well locations for the remainder of the program will be announced as they obtain joint venture approval.

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February 20, 2013